Mumbai housing sales declined by 8 percent on an annualised basis from 44,200 units in H1 of 2022 to 40,798 units in the first six months of 2023, but new launches witnessed a 6 percent growth year-on-year. The fall in the overall sales numbers in the country’s financial capital is largely on account of a drop in sales in the affordable housing segment, a report by Knight Frank India has said.
Releasing its report for India's top eight realty market on July 4, the Indian arm of the international real estate consultancy said housing sales dipped 1 per cent to 156,640 units in January-June from 158,705 units in the year-ago period. The share of sales of homes costing Rs 1 crore and above grew from 25 percent in the first half 2022 to 30 percent in H1 2023. This can be attributed to rising prices and homebuyers’ need to upgrade to larger living spaces with better amenities, said the report, which is released twice a year.
It said that the overall affordable segment saw a dip from 40 percent in H1 2022 to 32 percent in H1 2023.
The affordable segment, priced below Rs 50 lakh, has experienced a decrease in share, dropping from 52 percent in the first half of 2018 to 46 percent in the first half of 2023 in Mumbai. This shift towards the Rs 50 lakh to Rs 1 crore category can be attributed to the rise in property prices and the value mix of homes sold during this period, the report said.
The brunt of the collective impact of increasing rate of interest on home loans, COVID-19 and property prices inching up has been borne by the affordable housing market. Affordability has taken the hardest hit at the bottom of the market in this region, Gulam Zia, senior executive director, Knight Frank India, told reporters, adding with home loan rates coming down, the situation may improve.
Launches in Mumbai grew by 6 percent
Knight Frank India in its latest report India Real Estate H1 2023 noted a rise of 6 percent year-on-year (YoY) in H1 2023 (January to June 2023) in new residential unit launches in Mumbai to 50,546 units from 40,466 units launched in H1 2022. Against that, demand registered a moderation of 8 percent year-on-year in the same period with total sales of 40,798 units in H1 2023.
Almost 70 percent of the supply added in 2022 was in suburban markets like the western suburbs, Thane, peripheral central suburbs and central suburbs.
Mumbai witnesses 6 percent increase in average prices
The cost of homes in the city saw an annual rise of 6 percent with an average price of Rs 7,593 per sq ft in H1 2023 compared with Rs 7,163 per sq ft in H1 2022. Increased raw material prices coupled with strong demand were the primary drivers for developers to opt for a price rise.
India-facing businesses accounted for 76 percent of total office space transactions in Mumbai
The office market transaction volumes in this period rose close to 9 percent over the same period last year, recording 3.2 million square feet of deals in H1 2023. There was also a significant increase in new supply in the financial capital, driven by improved office transactions and developer confidence. The total supply added during this period reached 1.4 million square feet, representing a strong annual increase of 37 percent.
Andheri registered the largest volume of transactions with 0.49 million square feet of leasing in the micro market in H1 2023, closely followed by Lower Parel that saw leasing of 0.43 million square feet. Additionally, Goregaon and Bandra-Kurla Complex (BKC) each accounted for transactions of 0.44 million square feet.
When considering the end use of transactions, India-facing businesses accounted for the highest share in H1 2023, amounting to 76 percent of total transactions.
India-facing businesses are those that cater to the domestic consumer and are dependent on the Indian economy.
Following closely behind was the share of co-working spaces, which accounted for 10 percent of the transactions.
In terms of office rental value, most other micro markets saw a 1 percent rise across the other business districts of the city. While BKC and off-BKC areas witnessed 0.5 percent change over the previous year to Rs 165-300 per sq ft per month, the report added.
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